North Carolina’s House Bill 2 – rammed through the General Assembly and signed into law in less than half a day – manages to rope together a herd of provisions so misguided, harmful and unfair as to boggle the mind.
Bathroom protocols for transgender people, as ridiculously unnecessary as those rules are, may have been the feature that Republican legislators wanted to highlight. But the damage runs far deeper.
The law’s contempt for gays and lesbians, conspicuously omitted from groups entitled to be free of discrimination in the workplace and in public accommodations, is already costing North Carolina jobs and making it look like hog heaven for homophobes.
Speaking of jobs, the law says a worker shouldn’t be discriminated against because of his or her “race, religion, color, national origin, age, biological sex or handicap” – with sexual orientation and gender identity not included as grounds for protection. But it bars someone who suffers that kind of odious treatment from seeking redress in the state’s courts.
No wonder the bill’s backers and Gov. Pat McCrory, who rubber-stamped it, would rather keep people focused on the imagined ramifications of transgender bathroom use than on this outrageous affront to their legal rights.
Back-pedaling slightly after being hit with a blast of criticism, McCrory in an April 12 executive order said he’d encourage legislation that would restore that right to sue in some instances. He also declared that sexual orientation and gender identity would be among the categories respected within the anti-discrimination code for state government personnel.
Yet it’s worth remembering that under the Republicans who took full control of the legislature and governor’s office with the elections of 2012, hostility to workers has oozed along the corridors of power like a toxic spill. For instance, H.B. 2 even goes so far as to pre-empt local attempts to raise minimum wages.
The N.C. Justice Center, which advocates for the underprivileged, was front and center recently with precisely such a reminder – focusing on a law that could be described as H.B. 2’s misbegotten older brother.
Punishing the jobless
As the legislature’s newly strengthened Republican majorities convened in early 2013, an urgent order of business was to adopt House Bill 4, revamping the state’s unemployment insurance program. Most Democrats were opposed as the bill cleared the House and Senate. McCrory signed it on Feb. 19 of that year.
North Carolina was in hock to the federal government for some $2.5 billion that had been borrowed to meet a flood of unemployment insurance claims amid the depths of the Great Recession. Tax cuts to employers who finance the insurance system had worsened the problem. Now taxes had to go up. Employers – meaning the state’s big-business lobby – wanted to save money by having the debt paid off sooner rather than later.
However, they favored a scheme that’s reminiscent of forcing someone to buy the bullets for his own firing squad. Conservative legislators were quick to fall in line. H.B. 4 put the state’s unemployment insurance fund on a path to solvency – but it did so largely by slashing unemployment benefits.
The numbers are cold, and they’re ugly. As highlighted for the Justice Center by George Wentworth, senior staff attorney for the National Employment Law Project:
- The maximum benefit for a jobless worker was cut from $525 to $350 per week. That amounts to 40 percent of the state’s average weekly wage – short rations to ease the misery of unemployment that, by law, can’t be the worker’s fault if benefits are to be paid.
- Because of changes in the way benefits are calculated, the average amount paid per week has shrunk from $298 in 2012 to $235.
- The average weekly benefit ranks 43rd in the country in terms of the percentage of the average weekly wage that it replaces.
- The maximum period in which a jobless worker can receive benefits was cut from 26 weeks – still the standard in 42 states – to 20 weeks. But a sliding scale now in effect means someone can collect for 20 weeks only during times of peak unemployment. Because the state’s jobless rate has gone down, an unemployed person these days can draw benefits for just 13 weeks – the 2nd shortest eligibility period in the country, ahead only of Florida’s 12 weeks.
- Just 12 percent of North Carolina’s unemployed are receiving jobless benefits. That’s the 2nd lowest such rate nationwide, again ahead only of Florida. In 2012, the comparable rate here was 24 percent.
- “To be effective and actually help mitigate the economic impact of job loss, UI [unemployment insurance] benefits must be paid timely,” Wentworth writes. But under H.B. 4, North Carolina has ranked last in meeting the federal timeliness standard: 87 percent of first payments made within three weeks of filing a claim. It has made only 64.3 percent of payments within that time frame.
- Unemployment insurance is supposed to stimulate local economies under stress from a falloff in consumer spending during hard times. But H.B. 4 has undercut that helpful effect. For instance, Wentworth reports that during a recent 12-month period, the insurance program paid out $273 million that then became available for workers to spend. That contrasts with the $867 million paid in 2005, when the jobless rate actually was a bit lower.
Working but overqualified
It’s hardly a secret that companies resent having to pay taxes for unemployment insurance. The business lobby scored points with its argument that North Carolina’s benefits were generous compared with other Southeastern states.
Yet an ample insurance program pays dividends beyond helping jobless workers and their families meet basic expenses while workers search for another job. Wentworth explains what happens when the payout period is scaled back: “Since UI helps jobless workers stay attached to the labor market and search for jobs that are the best match to skills and earning potential, cutting weeks of UI in half means unemployed workers are often forced to take jobs that pay less or do not utilize their skills and experience or fall out of the labor market earlier.”
The same surely could be said when benefit amounts are whacked. In a sense, a skimpy unemployment insurance program means that the state ends up eating some of its seed corn.
An article of faith among conservatives who pushed H.B. 4 seems to have been that North Carolina’s jobless workers were having too much fun living off their unemployment benefits while doing what – going fishing? How illogical. Who would trade a solid job, if one were available, for a few months of benefits that were never lavish? How insulting to what has always been Tar Heels’ strong work ethic.
Still, those conservatives now try to tie the state’s diminished jobless rate to their “reforms.” Of course the overall economy has recovered somewhat. But just because people are filtering back into the workforce doesn’t necessarily mean they’re regaining lost ground. If someone takes a job for which he or she is overqualified, just to help pay the bills, that represents an erosion of human capital that harms both the individual and the state’s overall economic health.
Another expert who brought his perspective to bear for the Justice Center was Patrick Conway, economics department chairman at UNC-Chapel Hill. Conway’s conclusion is that the state’s improving jobless numbers also reflect a growing tendency of unemployed people to abandon their job searches and to drop out of the labor force, meaning they no longer are included in the unemployment rate. He’s skeptical that lower unemployment insurance taxes on employers – taxes have gone down now that the debt to the feds has been repaid — have significantly boosted hiring.
The Justice Center makes a good case that H.B. 4 needs revisiting before another recession, when thousands more North Carolinians would depend on jobless benefits. And it’s not far-fetched to think that the traditional targets of workplace discrimination – including women, people of color, the elderly, gays and lesbians – are even more vulnerable when the economy is poor and businesses are struggling.
H.B. 2 puts an unpalatable icing on H.B. 4’s noxious cake by making it harder for discrimination victims to take their complaints to a state court. The federal court option remains, at least in theory, but employment attorneys say the path toward a fair outcome is more difficult.
Gov. McCrory at least now has signaled his agreement that folks who believe they’ve lost their job because of discrimination should be able to turn to the state’s courts for relief.
Legislators due to convene in Raleigh on April 25 for their regular session – for all their fixation on who uses which bathroom – would show uncommon good sense if they took the governor’s cue. And they should include people who think they’ve been fired because of their sexual orientation or gender identity among those who can seek protection under the state’s laws.
That wouldn’t cure H.B. 2, but it would soothe the sting.